October 19, 2015

Chinese buyers to acquire Australia's largest dairy farm

According to The Australian, two Chinese buyers, Herman Hu and Kenny Zhang, have acquired Australia's largest and oldest dairy farm with a total investment of AUS220 million (US$160 million). Located in Tasmania, the 190-year-old dairy farm belonged to Australia's largest dairy producer, Van ­Diemen's Land Company (VDL).

Both Hu and Zhang have acquired 35% stake each in VDL through their respective companies, ­Ryoden Development and the Australia-registered Waratah Corporation, totaling to a combined 70% stake in the company.

It is reported that the deal is one of Australia's largest agricultural sales to foreign investors. As the transaction sum is significantly larger than the new AUS15 million (US$10.9 million) approval threshold set earlier this year, Australia's Foreign Investment Review Board will need to approve the deal.

Both Chinese companies have access to distribution and marketing channels in China and Hong Kong, and have approval to export and distribute food and agricultural products produced in Australia directly to China. The two new VDL bosses plan to further expand and develop the dairy farm and its infrastructure, with a key focus on China's growing demands for infant formula milk and milk-based health drinks for its aging population.